Best Personal Finance Spreadsheet – If you’re like most entrepreneurs, you probably have to divide your time between managing your team, getting sales, improving customer service, promoting your business, and creating new products or services. The last thing I want to add to this mix is the care of your personal finances (what a horror!). However, if you do not have the finances of your home in order, you are only adding more chaos and stress to your life … you realize it or not.
These 7 tips will allow you to make sure that your personal finances are in order before continuing to expand your business. Put them into practice and ensure their economic (and also emotional) stability.
1. Educate yourself
Take time to read about personal finances. Each week, schedule “money” appointments with yourself and spend a few hours managing your personal finances and reading books, magazines, websites, or financial blogs. The more you know about your own finances, the trusted mayor tends to manage your money in the long run.
If you need more help, consider hiring a financial coach to help you create a financial plan to reach your goals.
2. Check your credit regularly
Your credit report is like a file from you and your credit history. It basically tells lenders how risky you are, and whether or not you should lend money. When it comes to buying a car or a home, it is desirable that the credit report is in excellent shape, the way you can qualify for good rates.
Make it a habit to check your history at least once a year to confirm that everything is in order. Make it on a special date (such as your birthday) so that it is easy to record and maintain monitoring. You can access your history in places like the Credit Bureau.
3. Make a budget
Although this is very basic, many entrepreneurs do not have a budget in order to monitor their monthly income and expenses. You can use digital tools like applications to monitor your personal finances or simply an Excel document. No matter which one you choose, make sure it suits your lifestyle.
If you really want to fix your finances and take the lead financially, you must spend time and energy to update your budget every week. This helps you ensure that you do not spend more than you earn and that you are able to save for your financial goals.
Related: 10 digital tools for entrepreneurs
4. Automate your finances
Technology greatly facilitates the task of managing finances every day. Make sure that most of the process is automatic. You can use automatic online transfers or pay your bills online every month. This will help you not to stress by paying your bills on time and by generating interest from the extra charges.
If you worry about paying your bills, you can set your alarms on your calendar (on your computer or smartphone) to remind you of the payments. The more you can automate your finances, the less worries you’ll have a journal.
5. Pay Debts
Make a plan to pay off all your debts. Start by making a list of all your debts (credit cards, auto credit, educational credits, etc.). It includes the actual balance, the minimum payment per month and the interest rate. After reviewing your budget to determine how much money you can add to debt payments.
From here you can do research on strategies to reduce debts in the way that confirms that you are paying in the most efficient way possible. When we are working on reducing a debt, it is important that you have a “mattress” to pay for any emergency that comes along the way.
6. Build Your Own Mattress
Having a money mattress is an essential part of your finances. It allows you to use the money to pay for unplanned expenses or emergencies that may appear in your daily life, instead of increasing your debt or investing in the long term.
As an entrepreneur, it is convenient that you have a mattress of six to 12 months of your fixed expenses. This will allow you to pay personal accounts and not worry if you need to reduce your income due to the flow of the business.
7. Invest outside your business
Although it is very important that you always invest in yourself and your business, you should not have “all the eggs in the same basket”. Diversification is extremely important as it will lower your investment risk in the long run. Work with a financial planner to create a long-term investment portfolio that includes stocks, bonds and Cetes that align with your own financial goals and your risk tolerance.